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Wednesday, December 11, 2024

Legislation proposes tax-free employer contributions for disability savings

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Rep. Brian K. Fitzpatrick, U.S. Representative for Pennsylvania's 1st District | Twitter Website

Rep. Brian K. Fitzpatrick, U.S. Representative for Pennsylvania's 1st District | Twitter Website

Today, Congressman Brian Fitzpatrick (PA-1) and Congresswoman Sharice Davids (KS-3) introduced the ABLE Employment Flexibility Act. This bipartisan legislation aims to expand financial opportunities and enhance workplace options for Americans with disabilities. The bill focuses on ABLE accounts, which are special savings accounts for individuals with disabilities that allow them to save money without affecting their eligibility for federal assistance programs.

The proposed legislation allows employers to make tax-free contributions to these accounts, providing more flexibility in hiring and retaining employees with disabilities while helping these workers gain financial independence. "Individuals with disabilities deserve the freedom to access employee benefits and save for retirement without risking their eligibility for critical federal programs," said Rep. Fitzpatrick (PA-1). He emphasized that the bill removes unnecessary barriers, protecting essential supports like the ABLE program and empowering employees with disabilities.

Rep. Davids (KS-3) echoed this sentiment, stating, "Workers with disabilities should have the same access to employer benefits as anyone else." She noted that after discussions with Kansans like Rachel Mast, a person with Down syndrome, she introduced this bill to help workers build financial security without losing crucial federal benefits.

Currently, many employers offer 401(k) matching contributions as an employment benefit; however, workers with disabilities often miss out due to strict federal asset limits tied to programs such as Supplemental Security Income (SSI). Contributions to retirement accounts can inadvertently disqualify individuals from these benefits.

The ABLE Employment Flexibility Act seeks to rectify this by allowing tax-exempt contributions from employers directly into employees' ABLE accounts rather than traditional 401(k)s. This change aims at enabling workers with disabilities to save for their future without endangering necessary federal support.

Jim Hudson of the National Down Syndrome Congress expressed enthusiasm about the bill: "NDSC is thrilled about the introduction of this bill... [it] will enable the payment of retirement benefits directly into their ABLE account."

People with disabilities face significant economic challenges; they are over twice as likely to live in poverty compared to those without disabilities. Their families often require substantially more income just to achieve a similar standard of living. The ABLE program has already assisted over 170,000 people across America in saving an average of $11,186 each.

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